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The Evil Ways of Mitt Romney, Vulture Capitalist

Jan 10, 2012
Joe Hyde

You wrote this. Only a communist or an egomaniacal lunatic would desire to vote on their own stuff.

Click "Okay" and close this before someone sees this.

When Mitt Romney Came to Town

Mitt Romney is under attack from all corners, The Left, and the Not Romneys for his leadership at Bain Capital. Rush Limbaugh was on the radio today almost lambasting Newt Gingrich for attacking "free enterprise." Many conservatives, and Romney himself, have noted that they are surprised that the Bain Capital exposé is originating from the right, and not from the left.

Two things to consider. First, in the vetting process, we need full disclosure. If we right wing folks aren't vetting Romney's record at Bain, looking around every tree and under every rock, I guarantee Obama's team is. In fact Obama's team is salivating to go after Romney, whose ability to run for president is a direct correlation of his earnings at Bain.

When I was in Iowa, a political consultant told me about how Romney is using millions to shape the nomination. One example is during the debates. This was particularly true at the Las Vegas debate. The sponsors of the debates sell tickets for the audience. These tickets are fairly expensive. Romney's campaign, or PAC, or whoever, bought a majority of the tickets and packed the house with hecklers for Romney. Do you remember the crowd's reaction, its fawning applause, to everything Romney said in Vegas? The audience was stacked against Perry and all of the others. The debate's results were shaped by inaccurate reporting on the part of the media as to what really transpired. News media outlets reported that Perry's attack against Romney about Romney's hiring of illegal immigrants to perform his yard work was ineffective, because no one clapped. They didn't clap because they were the guests and surrogates for Romney!

Romney is worth at least $250 million. At least that's how much was in his pocket when he left Bain Capital. In 2010, Romney's income was $9.3 million. He has enough cash to loan hundreds of millions to his campaign. Why not pack the debate audience by buying expensive tickets for his surrogates?

Romney's net worth was earned on the back of American entrepreneurs and workers. I was the victim of venture capitalists in 2004. I had a thriving business with multiple streams of revenue. One day a VC appeared on my doorstep, told me how great my company was, and offered to buy it through a fancy four stage financing scheme. I didn't think the plan was too bad at the time. It allowed me to leverage the business operation I had and expand into new markets. What's more, I would be working for the larger, more powerful entity. I fell for the trap.

After the deal was signed, my former business, which employed 15 great employees, and fed 15 families including my own, was loaded up with too much debt, and I was given a revenue growth plan that was unrealistic. As soon as I failed to meet those revenue targets, all hell broke lose. I was blamed for every failure that was coming. I bailed, leaving a $250,000 liability with my name attached to the horror. What was really happening was that the VC was attempting to use my company's cash flow to finance other acquisitions. In the process, the debt, and the pressure to meet unrealistic obligations to service that debt, broke my back. And I have a very sturdy back!

It is six years hence, and I have finally recovered from the ordeal. I went through a financial crisis, a marriage crisis and a career crisis. Luckily, and by the grace of God, I survived.

Every once and a while, a VC will get lucky and find a business and a business owner desperate enough to accept VC funding, and have that company thrive. Staples, in Romney's case, may be one of those. But in the meantime, there are probably hundreds of orphan companies that run well enough on their own, but cannot grow fast enough to meet VC expectations, or rise to VC-imposed debt obligations. A VC like Romney will gut them, fail the company, and everyone except Romney loses.

That's how Romney created $250 million in net worth for himself: By breaking the backs of otherwise hard-working, honest American workers and entrepreneurs. I hate people like that.

If you have a good business, stay away from vultures like Romney and grow your company, and provide for your employees. That's the American Dream!

The Chicago Tribune has a great explanation of the Romney modus operandi at Bain Capital:

Private equity firms operate through leveraged buyouts. They create limited partnerships to buy companies, usually pretty healthy ones since it’s the only way to attract financing, and then they burden the companies with debt while trying to make the balance sheets look good, often by cutting costs such as workers or their benefits, to flip the companies within five years for a profit.

Private equity firms put a relatively small amount down, say, 20 percent, and the companies they are buying borrow the rest from banks making them responsible for repayment. Suddenly, a company that had a reasonable debt load, if any, is subjected to crushing repayment obligations.

(Source: Chicago Tribune: "How Romney Grew Rich")

When my former company was foreclosed upon, it was no more than a shell and employed no one. The customers still needed the service, but the company under VC management after I left had treated its customers so poorly that there wasn't any goodwill remaining in the name.

I don't care what Rush Limbaugh says. As the Chicago Tribune notes, the actions of "spend little, borrow big, evade taxes and get control of a lucrative asset" is not entrepreneurship at all; it is theft.

VC theft is how folks like Romney get filthy rich, not by adding value, but by flipping businesses like they are condos. In the process Romeny's types are destroying the value of everyone else's American Dream.

Romney is using his hundreds of millions to "connect" with voters in a way that he could not connect with anyone at all without that horde of cash. The sad part is that much of that net worth was made on the backs of Americans pursuing the American Dream. They just didn't know the rules of the game changed. Nor did they know that Romney and his colleagues created the new rules.

And that, Mr. Limbaugh, is un-American. It's evil.

Read more about it at suntimes.com

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This is exactly what took

Jan 10, 2012 8:23 am

This is exactly what took place in our company... we were thriving... Had the FIRST Smoke Alarm manufacturing company in the United States. We were growing so fast in sales that we had to work day and night to keep up. We grew by 500 employees our first 24 months in business. One day a VC knocked on our door... they wanted to buy us out... We did our research, they were solid and liquid. They offered us a small fortune. We decided to take the deal, knowing that because our product was so popular that it was just a matter of time until the large companies like GE jumped into the field, and then it would be difficult to compete. We got some money up front in the sale and carried paper on the remainder of the sale amount. The deal was just like yours, keeping the main business owners in position. Within six months, our financial officer was fired, and replaced with one of their people. My husband, the sole business partner, President of Manufacturing was kept in place because they did not have the talent to handle the manufacturing process. Within another four months the VC Capitalist's "holding company" that purchased our company, began grossly mis-managing the business (they were draining their capital from it), they sold the rights to the technology in our business to another of their holding companies, and within another 12 months they filed bankruptcy. They got the technology, patent rights). That is what they were after. We never were paid the amount owed. Young and dumb, that is what we were. We had a great business that was stolen from us because we did not know the game. Over 700 employees were put out of work. This is what Romney IS. He is NOT a JOB creator and this is what he will do to the rest of what is left of America. You will NOT see American JOBS with Romney. You will see the rest of the jobs be sent out of the country in exchange for the tax revenues from US Companies that will move the rest of the jobs to other countries. Romney is a vulture who has sucked the blood out of American businesses to build a personal fortune. He is a predatory Capitalist with NO business ethics. This is where American businesses lost their ethics in the 1980's, and this is where America went down the tubes. The PEOPLE MUST be part of the business equation for America to survive as the America where the American life style is a prosperous equation for all from the top of the company to the bottom most employee.

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Cheryl--

Jan 10, 2012 11:12 am
Joe Hyde

Cheryl--

You said it quite well. You are right about the American prosperity not being advanced by vulture capitalism. Thanks for sharing your personal story!

Joe

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Erick Erickson at RedState

Jan 10, 2012 11:14 am
Joe Hyde

Erick Erickson at RedState has a more nuanced analysis of Perry's attacks on Romney-Bain:

The Perry attacks are, actually, a bit more carefully nuanced and, I think, work better [than Newt Gingrich's]. According to Perry, “There is nothing wrong with being successful and making money, it’s the American Dream. But getting rich off failure and sticking someone else with the bill is indefensible.” His attack was based on one aspect of Romney’s work, not the entirety of it.

(Source: Redstate: Attacking Bain)

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I sincerely and fervently

Jan 10, 2012 12:52 pm
John Cook

I sincerely and fervently applaud Governor Perry for sticking to "his guns" and his word. There IS a distinct line between Washington and Wall St. A line so vivid and bold that the lobbyists and special interests, in this case the venture capital firms and buy-out firms, have somehow convinced the establishment to REDEFINE capitalism.

Governor Perry has proven by his record in Texas that he wholeheartedly supports capitalism. That idea of a single person or corporation succeeding in their mission of starting and growing a business for the good of all, including themselves. ONLY the GOP establishment as a whole and most importantly those funded by the "bottom feeders", much like Bain, are making the claim and plea to NOT attack such firms or their practices. I vehemently disagree!!

Venture capitalists and buy-out firms, before making their "pitch" to the current business owner, have done their research and determined before-hand their entrance AND EXIT strategy. Certainly, in order for the unsuspecting business owner to accept their offer, that EXIT strategy is never revealed. For some, such as Staples, the firm did see a future of growth as well as the ability to profit everyone. But in far too many cases the EXIT strategy was for the firms to make the "pitch", grab the money, leaving the previous owner with little money but a whole lot of worthless paper and EXIT stage left.

As for me, that's NOT capitalism! That's FRAUD !! They, the venture capitalist or buy-out firm, knew it going in but failed to divulge their intent.

P.S. This is NOT an indictment on those venture capital or buy-out firms who daily assist and strengthen those with who they partner. For them, I have personally been grateful as many more of us. It's just a matter of intent and loyalty of which companies such as Bain, with Romney at the helm, has a far less than stellar record.

MORAL: Don't buy the "pitch" of Romney or those establishment "figures" screaming foul in the name of "capitalism"!! They will never divulge their EXIT strategy but you can bet when they do, their pockets will be full, yours empty.

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Can we get past this mess

Jan 11, 2012 12:37 pm

Can we get past this mess with Romney and move on to what the people want to talk about. Please, JOBS, economy, reducing congress, honesty, & integrity, this is what I want to hear. I have been a strong supporter of Perry, but very disappointed that he can't stay bold, positive, & uplifting. We are in need of a healing President. It can't be done getting off course spending time destroying another. Romney and Newt will do that all by themselves. They don't need Perry's help. Most Americans don’t like politicians because of the mess we are listening to now. Keep it up and Perry looses and so do we.

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